Almarai says recent diesel price increase to result in USD53.2 million additional cost
(MENAFN) Saudi Arabia’s Almarai has disclosed that the recent diesel price increase, effective January 1, 2025, will result in an additional direct cost of approximately 200 million riyals (USD53.2 million). This announcement was made through a statement published on the Saudi market’s website. The company also highlighted that the increase is expected to have indirect implications on other parts of its supply chain, potentially amplifying its overall impact. Despite this, Almarai emphasized its commitment to enhancing business efficiency, improving costs, and pursuing various initiatives to mitigate the financial burden caused by the higher diesel prices.
The price adjustment comes as Saudi Aramco implemented a 44 percent increase in diesel prices, raising the cost to 1.66 riyals per liter starting January 1, 2025. Aramco follows an annual review mechanism for diesel prices, which it introduced in 2022. This latest adjustment marks the fourth annual review since the policy was implemented. At the beginning of 2024, diesel prices were also raised significantly, with a 53 percent increase to 1.15 riyals per liter, underscoring a trend of escalating fuel costs over recent years.
Almarai has demonstrated resilience in navigating these challenges, with its profits increasing by 12 percent during the first nine months of the current fiscal year, reaching 1.8 billion riyals. This strong financial performance reflects the company’s ability to manage operational pressures while maintaining growth. Nevertheless, the rising diesel prices are expected to add strain to its operations, prompting a stronger focus on cost optimization and efficiency.
In a separate development last month, Almarai’s board of directors recommended distributing cash dividends for the fiscal year amounting to one billion riyals (USD266 million). This move, aimed at rewarding shareholders, reflects the company’s continued commitment to balancing financial performance with stakeholder returns, even as it faces rising operational costs tied to fuel price increases.
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